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Property Investment

Mortgages are loans for buying homes. Like any other loan, a mortgage must be secured against another asset. The asset that is used to secure mortgages can be the property that the mortgage is used to buy. Protection is not arbitrary. There must be documents that show that a mortgage lender and borrower have agreed to use a property to protect a mortgage. This document is referred to as mortgage deed. The other document that can also be used to protect mortgage is the trust deed. These documents serve the same purpose as far as mortgage protection is concerned. The difference between them is the ease with which a lender can foreclose a property in case of default in mortgage repayment.

Contents of Mortgage deeds

Mortgage deeds are a document with a collection of agreements from both the lender and the borrower. It includes conditions of the mortgage, repayment schedule, length of the mortgage, mortgage rates, type of mortgage and security for the mortgage. As a borrower, you have to understand the terms and conditions thoroughly and may ask professional help to analyse it. The terms are legally binding and can be enforced by law if you fail to pay the mortgage during the repayment period.

Importance of Mortgage deeds

Borrowers are expected to repay their mortgages over a given duration of time. This duration of time varies with the size of the mortgage and the amount of monthly or biweekly instalment that a borrower must make. Mortgage repayment can extend for as long as 30 years. The long duration of mortgage repayment allows the buy to repay comfortably without going through a tough financial crisis.

Lenders usually ensure that a buyer is fit for a mortgage before giving out the money. Every financial information about a purchaser is thoroughly analysed. A buyer must have a good credit rating and a steady income to qualify for a mortgage. Credit ratings are obtained from the buyer’s credit company. The buyer's income can be verified by analysing his employment record and salary or, for unemployed buyers, their tax returns as edited by a certified public account. These pieces of information show the financial stability of a buyer and his ability to repay his debts.

The presence of a property is not sufficient to guarantee that a buyer will repay his dues or that a lender will fully recover his money. Even verification of financial stability and credit ratings are not enough to guarantee lenders that their money will be repaid in time. Mortgage deed and trust deeds are the only ways lenders can rest assured that they will recover their money.

Failure to abide by Mortgage deeds

Most mortgage deeds allow lenders to foreclose a property after 60 days of default in outstanding payment. Foreclosure involves selling off a property and using the money to pay off debts owed by a buyer. Foreclosure is usually the last resort for most lenders. Foreclosure comes at a time when buyers are not prepaid to seek additional means of accommodation. The buyers do not have the money to spend on rent or purchase of another property. Rents are usually even more expensive than mortgage. A borrower whose home is foreclosed can either move in with a relative or be rendered homeless.

There are many other ways that a borrower and his lender may come to an agreement without having to foreclose. A borrower may negotiate to agree on a new method of repayment that suits them both. This should be done way before foreclosure is considered. Foreclosure must also be undertaken in a way that a buyer is fully satisfied with. The decision to foreclose cannot appear to a lender from out of the blues.

Buying a home is a major decision that people in the UK have to confront one time or the other. Most of the elderly population of the UK that own homes bought their houses when they were 35 years old or younger. This is back in the day when house prices were lower and incomes relatively higher. Time has seen property prices rise as compared to incomes. Now, only 44% of people under 35 years own their own homes. It can now take up to 20 years for a buyer to save enough money to buy a house.

Causes of Brexit

Property prices in the UK have been quite unstable since Brexit of June 2016. Price increases have fluctuated and are expected to remain volatile until Brexit is fully finalised. Property prices have generally fallen by 2%. The low property prices mean that buyers can have a better deal now than some time back. With the finalisation of Brexit approaching and given the fact that property prices are expected to rise again after Brexit, it may be wise to buy property now. The best part about buying houses now is that interest rates have fallen. A buyer will enjoy low-interest rates as well as low property prices.

Foreign investors have even a lot more to enjoy if they buy houses now. Brexit caused a decrease in the value of a pound. Foreign investors can take advantage of this by purchasing a house and selling it when the economy stabilises, and the value of the pound rises. Domestic transactions have fallen since Brexit. More properties are now in the market. It is easy for a foreigner to get a property to buy now than it was earlier.

Properties in London

The ease of buying a house depends on the location of the house. London real estate market is viewed by many commentators to be different from those of other parts of the UK. You can verify this position by analysing the wide margin of property prices between London and the rest of the UK. The average price for a residential property in London is £750,000 while that of other parts is £290,000. This is true even in properties with similar architecture. High property prices in London can be attributed to the abundance of opportunities in the city and the popularity of buy to let properties.

Approval criteria for buy to let properties are different from those of residential homes. A buyer of a buy to let property is only expected to pay over 25% or more of his achievable income. Mortgage for residential properties, on the other hand, is issued depending on buyers’ levels of income. This has been a disadvantage to low-income earners who make the largest population of the city. Many low-income earners in London have now been forced to rent rather than buy their own homes. As a result, people are now moving out of London to buy property in outer boroughs and other places where prices are still low.

So, if you were saving up for a new home, it does look like the prices are in your favour at least outside of London. However, the full effects of Brexit are yet to be seen, and it is unsure what changes it might bring. It depends on your expected future depletion of the housing market or capitalising on current drops in rates.

A housing disrepair protocol is a systematic procedure that is followed in cases where a tenant believes that a landlord has neglected his housing repair responsibilities. Homes must be maintained in proper working condition. Tenants have the right to live in a comfortable environment. The law has clearly defined both tenants’ and landlords’ responsibilities towards property maintenance. Responsibilities of tenants are usually minor. It is the landlords who must account for major repairs in the house. Neglect of property maintenance forces tenants to live in dilapidated environments. These tenants have the right to sue their landlords.

Use of Housing disrepair protocol

The purpose of the housing disrepair protocol is to guide tenants and landlords in solving cases of house disrepair without engaging the law. Intervention of the courts can only be sought when all procedures in the protocol have been followed in vain. It is the tenant who usually initiates housing disrepair disputes. This is because they usually have lesser house repair obligation than landlords. Nevertheless, they cannot seek help of the court before following the procedures of the housing disrepair protocol to the latter.

The reason why the protocol is given first priority over the court is the long and expensive litigation procedures that are associated with court cases. A tenant who approaches the court for help in disputes of house disrepair may have to pay more for the litigation process than the cost of repairing the house. This is also true for landlords. It is more economical for the two to solve the disputed between themselves. Court cases may also take long because evidences must be collected and witnesses questioned. All these litigation process are inconvenient and should be a last option.

How to start Housing disrepair protocol

First in the dispute resolution procedure for cases of house disrepair is involvement of a mediator. Landlords and their tenants are encouraged to seek the help of a mediator before presenting their case to court. The protocol gives examples of mediators that landlords and tenants can engage in dispute resolution. Each of these mediators are suited for every type of tenancy that in the UK. Council tenants can seek mediation from their local authorities. The local authorities have procedures, rules and regulations for settling out disrepair disputes. However, disputes that are solved by the Local Authorities are limited to house repair costs not exceeding £250.

You can get information about how the Local Authority settles disputes from the Department of Communities and Local Government, Eland House and Bressenden Place. Housing Association tenants can present their complaints to the Housing Ombudsman Service.

Other claims within Housing disrepair protocol

There is much more to the housing disrepair protocol. Each stage of the protocol is meant to prevent the dispute from escalating beyond unmanageable level. It is also important to note that the nature of disrepair claims are never similar. The cost of disrepair is different from one claim to the other. These are treated differently. Disrepair may also involve personal injury claims. This may call for involvement of a General Practitioner or even a more specialised medic. Every situation is dealt with differently. Parties involved in disrepair claims must go keenly go through the housing disrepair protocol so that they know the procedures that they are expected to follow.

Moving into a new flat is one of the biggest steps in a person’s life. This is especially true if you have been living with your parents or roommates most of your life. When you move flat, you finally get to enjoy the freedom you have always wanted. With freedom come responsibilities. Flats do not maintain themselves. They must be carefully tended for by the residents lest they become shoddy. You must also accurately know the rules of tenancy. The second biggest reason, other than rent default, which causes people to lose their tenancy deposits is a breach of tenancy agreement. You must thus know every clause that guides your tenancy.

Plan your finances

People move into new flats when they are confident that they will pay the rents. Financial misfortunes happen to everyone. The last thing you want to do is fail to pay your rent. Rent arrears can taunt you for months or even make you homeless. You have to organise your finances well. Never move into a new flat simply because you have an inkling of how to pay rent for the flat. You must be double sure of your abilities to cater for your new accommodation.

Check the accommodation according to your needs

The idea of moving into a new flat may seem exciting until you realise that the apartment does not match your personal standards. Houses in the UK have different fixtures and fittings. They are also of different sizes. Before moving into a flat, make sure that it has the things that you want. Make sure that it is large enough to accommodate you. Online conveyancing has made the virtual exchange of property ownership very easy. A negligent tenant can forget to inspect a flat with the belief that his solicitor will do all the work. A solicitor can only do so much. The solicitor will not know your heart’s desires especially if you do not express them to him in writing. It is the responsibility of a tenant to ensure that the new flat fits his personal needs.

Inspect the contents

The fact that a flat has everything does not necessarily mean that those things are working. A used flat may have several fittings that are out of order. Flat inspection has to be thorough. Try out windows, taps and switches to make sure that they are working. Never base your judgment on what you see on catalogues. Catalogues may have very attractive features but turn out to be hogwash. You must take an incentive to visit the flat and try everything.

Checkup all terms of Agreement

Besides faulty fittings, the other thing that can make your life miserable is the tenancy agreement. Tenancy agreements cover many items. They are usually drawn by landlords even before a tenant expresses interest in a flat. A careless tenant will take a fleeting glance on the agreement and append his signature. This is the worst mistakes you can ever make. If you sign an agreement and later claim that you did not know its contents, even the court will not listen to you. Make sure that you know all terms of tenancy. You must know who is responsible for repairs, whether you are allowed to have pets, or if you will have to pay your gas and electricity bills.

Properties around the coast are always believed to be very expensive. A good home offers comfort and relaxation. Properties around the ocean have all the comfort and relation that anyone can ever want. Think of the sandy beaches, the horizon, the tides and the sound of the sea as it tries to find its way into the mainland. These are things that anyone would want. A good evidence is the huge number of people who would make beaches their priority if they had an opportunity to do so. The predilection of tourists to visit the beach has made beachfront properties to be viewed in high regard. However, the UK property market has gone extra lengths to make sure that there is at least one good cheap coastal property for a beach enthusiast. By now, there are many coastal properties that are way more affordable than you can imagine.

The key to getting a cheap seaside house is choosing the right location. One thing that you need to know is that seaside properties have similar benefits despite where they are located. The weather is the same, ambience the same, and if you fear seclusion and want some social interaction, you can just drive for a few miles to a nearby town. There is always an avenue for entertainment around the seaside.

Skegness

To your surprise, you will realise that some seaside properties are way cheaper than those in air-polluted towns. Take an example of Skegness. Skegness is a seaside town in the seaside of the district of Lincolnshire. This city is one of the biggest tourist attraction sites in England. It has warm weather in almost all seasons. This has been the case since the early 1990s. Skegness has good transport systems such as roads and railways. A town such as this could be expected to have some of the most expensive real estate properties. Surprisingly, the city boasts of some of the cheapest houses in the UK. House by the beach can go for as little as £160,000. This is very cheap considering that most of the outer boroughs of London cost over £250,000. With the sea as an added advantage, Skegness in one of the cities that you definitely should consider buying a property in.

Swansea

If you thought that Skegness was the best, think again. Swansea has even more. Swansea is the second largest city in the county of Wales. It is also the 25th largest city in the whole of the UK. This just tells you that it is full of modernisation. Strangely, Swansea is a coastal town with one of the lowest house prices. A home in Swansea can be as cheap as £170,000. Considering the rich history of this city, such a price can be regarded as a real bargain price. This is not to mention the geographical as well as climatic beauties of the city. Remember that there is a popular football club that is named after this city.

The examples above are just a small representation of the coastal towns where you can find cheap housing. Solicitors have made these places even more alluring by offering convenient conveyancing fees. You will be missing out a lot if you have not bought a coastal house.

House Price Index (HPI) is a measure of periodic increases in the prices of residential housing. These estimates are calculated after a given period of time. They offer a snapshot of the trends in the price of residential properties. HPI is obtained through various mathematical and statistical concepts. These include the Hedonic Regression Model, simple moving average and repeat-sales regression model. England uses the Hedonic regression curve to calculate its HPI. HPI is calculated monthly in England.

Other countries such as Northern Ireland calculates there HPI quarterly. The body responsible for calculating house price index in England is the Office of National Statistics. This office uses data from the Land Registry, Registers of Scotland and Land and Property of Northern Ireland to arrive at its figures.

The Office of National Statistics generates the house price indices every month. However, they can come up with data any other time of the month. Their offices analyses the data and prepare and report for House Price Index. They may also generate these data at when requested to or during the Council Tax fairs.

Before the advent of the internet, HPIs were just available in the Office of National Statistics. There are now many websites that post HPIs. Some of these data can be trusted while others are doubtful. The most reliable website is that of the government of the UK. You will see it when you search for HPIs online. Its web address will show you clearly that it is a trusted government website.

The government website gives you two options for getting HPI information. You can search the HPI data online or download them. If you choose to search them online, you will be directed to a page where you will get a particular group of HPI data. The data are regularly updated so that even those of the immediately previous month are available.

The government has gone an extra length to ensure that its HPI website serves its clients correctly. A user can simply type in his query and results will be generated instantly. There even examples of queries that have been included posted on the website. The sample queries guide users in wording their search terms. The government website uses SPARQL to generate a report of the query entered in the search tool. These outputs are in different formats with the format capable of suiting every user. Other trustable websites are the Open Government License and Open Data License websites.

The Office of the National Statistics has updated and posted house price index of February 2017. This is an incredible fete given that February started just a few days ago. These data were available right at the beginning of the month. Average house prices of residential properties are expected to around be 225 000. This is a rise of about 10 000 of house prices in February of the previous year. The 10 000 is the annual increase in property prices from last year to this year. House price index for February 2017 is 118, a rise of 3 from the 115 figure of February of last year.

Tenant eviction is a painful process to both the tenant and the landlord. A landlord loses his source of income when he throws out a tenant. He at least gets to keep his property. The most affected party in an eviction is the tenant. The most common cause of eviction is a failure by a tenant to pay his rent. Tenants who cannot pay rent probably do not have any money. They are forced to seek alternative means of accommodation urgently. Most residents end up living in the streets. The court has various mechanisms for protecting tenants. However, they can only do so much. This implies that eviction is sometimes the only option that a landlord and the court has. Eviction must be carried out in legally acceptable manner. Landlords and estate agents must know how to evict a tenant.

Everyone needs a roof over his head. The right to shelter is recognised and respected by the law. The most common form of housing in the UK is rental housing. This is where a tenant pays a given amount of money to a landlord or an estate agent in exchange for a living space. Longevity of tenancy is subject to all parties to the tenancy abiding by an agreement. Included in the conditions of tenancy is the amount of rent to be paid and the conduct of all sides. Breach of this agreement leads to termination of tenancy.

Legal grounds for Eviction

There are several grounds for tenant eviction. The most common reason for evicting tenants is an accumulation of rent arrears. These include violation of a lease, damage to property, illegal drug activities and the expiration of a contract. It is important for a landlord to talk with a tenant before evicting him. Eviction should be a final option and not the preferred one. Residents are usually willing to speak with their landlords about matters that affect their tenancy. If rent arrears are the cause of the dispute, the tenant may propose ways of paying the rent. Those who are rowdy or negligent may also change their behaviours. Discussion between tenants and landlords helps resolve tenancy problems amicably and in the most human way possible.

Notice of Eviction

The notice of eviction has to be served properly. A tenant can easily deny receiving a notice. It is important for the landlord to keep a copy of the notice as evidence. The owner can take the notice to the tenant by himself. It is even better if a witness accompanies him. If the tenant fails to obey a duly served notice, the landlord is allowed to seek the help of the judicial system.

Refusal by Tenants

If the tenant refuses to listen to his landlord, the landlord has the right to throw him out. There is a legally accepted procedure for tenant eviction. An owner must follow every step in the process or face legal action. The first thing he needs to do is serve the tenant with a notice of eviction. This notice must be written clearly. Grounds for removal must be included in the notice of eviction. Notice of eviction gives the tenant maximum of two months to vacate the property.

As you settle as a private tenant in the UK, you are likely to be an assured shorthold tenant. As per the type of tenancy and accommodation, you may have a different kind of tenancy. As a tenant, you have to know what kind of tenancy you fall under. This helps you know your private tenant's rights or any other rights that apply.

Assured Shorthold Tenant

If your private tenancy started after 28th, February 1997, you are automatically an assured shorthold tenant. Tenants before that may have to confirm it with their landlord. As an assured shorthold tenant, the landlord is responsible for the particular type of repairs. This are necessary repairs, and you have a right to claim it. If the landlord tries to evict you instead, it Is known as “retaliatory eviction”, and you can dispute this in a court.

Private Tenancy Deposits

As a tenant, the landlord will ask for a deposit for unwarranted damages you might cause to the property. However, as a private tenant, you are assured to have the deposit returned to you as your tenancy ends. The failure of the owner to inform you of the scheme being used during the tenure and refusal to return the deposit is against your right, and you can dispute the case.

Housing benefits

Housing benefits help tenants with financing difficulties pay their rent. This is a right you have as a private resident, and you need to request approval and check how much you are going to get. This benefit requires eligibility and isn’t equal to the total tenancy cost.

Right to Notice

As a private tenant, you have the right to get prior notices from the landlord for activities that affect your tenancy. In a case the landlord wants to evict you, they have to follow the due legal process to inform you of the cause and other information related to the eviction.

Tenancy documents

As you move into the tenancy legally, you are entitled to the tenancy documents. These include agreements made before the tenancy started, deposit schemes documents and others that relate to your legal agreement with the landlord. You are entitled to this documents within the first month of the tenancy.

Freedom from illegal evictions

As per your private tenancy agreements and laws, if you follow your responsibilities, you are entitled to have a peaceful time with your home without annoyances from the landlord or any other parties. The landlord cannot illegally evict you and cause you a legal burden. Any unhealthy confrontations, threats and forcing illegal evictions from the landlord can be a case to prosecute the owner.

These are some of the primary private tenant's rights you have to understand as a private tenant or a private landlord. Following a search for a tenancy, you have to verify you have these rights before you sign an agreement. If you are within the boundaries and follow your responsibilities you do not have to fear having illegally evicted, services cut or be harassed by the landlords.

House in Multiple Occupation (HMO) represents a property with 3 or more residents that aren’t part of a single family or household. This is a modified definition of HMO from the Housing Act of 2004. The house will have split bedsits for each resident, and each of them will have a different agreement with the landlord. For a household to be considered an HMO, it should be mainly used to accommodate tenants and as residents should use it as their principal residence.

As a landlord, it is your responsibility to register the rented property as a House in multiple occupation to your local authority. Once notified, the local authority will access the living space for all the tenants to see if they are being handled properly. After the assessment, if you are found to be maintaining the property efficiently, you will be giving an HMO licence. If you are unsure if you need an HMO license, it is recommended to contact the local council to check if you require one.

You will not need an HMO licence if you are:

Living with two other lodgers in your property

A care home or a bail hostel

The property is flat share

The residents of the property are long leaseholders or freeholders

Purpose-built blocks or flats

Responsibilities of the Landlord in HMO

There are responsibilities for the owner to maintain the property properly, so it is fit for every resident to live comfortably. In doing so, landlords have to fulfil these criteria.

Fire safety:

The house in question has to have proper fire prevention measures implemented so it can prevent uncontrolled fire related accidents and provide a safe way to deal with one. There should be fire alarms, fire escapes, fire resistant door and windows. This assessment is carried out by an accredited professional. Electrical inspection of the house is necessary every five years.

Uncrowded living space:

The house should provide decent living standards for the residents. It should not be unreasonably overcrowded for every resident to live in a peaceful environment. There should be adequate cooking and washing facilities that should support the resident without the need to take turns.

An inspection will assess what requirements need work. This assessment can entitle you to get HMO renovation grant for fire security, amenities and energy efficiency work. These grants are different based on your location so that you will need more information about the grants.

These are requirements that have to comply with Housing Health and Safety Rating System (HHSRS). If you are unable to bring the house up to HMO standards, you may land yourself in big trouble.

Benefits of House in Multiple occupancy for landlords:

There is often higher return on your investment with HMO

Higher rent yield can be expected than single tenancy

Unlike single residency, you do not have long void periods without tenants

Have more control over your property.

If you have an eligible house for HMO, with a bit of added amenities like broadband, TV, phone lines and regular cleaners you can attract many tenants to your property. Students, new couples are highly interested in these type of properties so you can make a decent profit all year around with a house in multiple occupancy licenses.

If you have rented a property from a landlord after February 1997, you are automatically an assured shorthold tenant. Since then this has been the most common form of tenancy contract in the United Kingdom. The Assured Shorthold Tenancy (AST) agreement is a document that outlines the primary conditions, details regarding the tenancy between the tenant and the owner. The assured shorthold tenancy does not provide long-term security for your stay, and the landlord can legally evict you by following due procedure.

The assured shorthold tenancy agreement is usable to property whose rents are less than £100,000 yearly, holiday home, rented to a private company or a government body. The annual rent also should not be less than £1000 in London and £250 elsewhere in the UK.

What does Assured Shorthold Tenancy contain?

AST can include a lot of details such length of tenancy, rent payable, the person responsible for the tenancy and other details. It can be hugely in detail with terms and conditions of the tenancy. Without a rigid format, it can be sourced by a company or through online sources. However, this is a legally binding agreement and should be taken very seriously while signing the terms. As a tenant, you have to understand the agreement. As a landlord, you should use proper language and words to explain the conditions and clauses easily and not try to confuse the tenant.

The things that are to ATS agreement include are:

Complete details of the property including address, numbers of rooms.

Length of the tenancy

Deposit to be paid by the tenant

Agreed weekly, monthly or yearly rental payments and dates

Person who’s responsible for the water, gas, heating bills

Responsibility of the tenant to keep the property in a healthy condition

Damage, repairs and maintenance responsibility

Signature of both landlord and the tenant

What AST agreement protects you with?

As outlined in the AST agreement, the landlord cannot evict you without proper grounds. This is against your will and can be used to sue the owner. However if the both parties decide to end the tenancy earlier than the designated date, it can be negotiated.

The landlord also cannot increase the rent as he wishes during the tenancy of the resident. Unless you agreed to a condition allowing a rent change, there is no legal ground for the landlord to confront you with high rents.

The agreement also outlines the deposit to be paid to the landlord at the start of the tenancy period. The landlord is responsible for depositing the money into a government approved Tenancy Deposit Protection scheme and notify the tenant within the first month.

Other basic laws like indiscrimination against tenants also apply with AST agreement even though they are not outlined in the agreement. Residents are entitled to live peacefully in their home during the tenancy period without any confrontation, illegal eviction from the landlord.

Rent deposit protects landlords from tenant’s failure to pay rent and from damages to the property that the residents live in. This money is paid at the beginning of the tenancy. It is usually equal to the rent paid by the tenant. Rent deposit does not belong to the landlord. It may be reclaimed by the tenant at the end of the tenancy period. The landlord merely holds the deposit until the end of the tenancy. This money is protected in a tenancy deposit scheme. The scheme ensures that the landlord does not use these funds until he is allowed by law. This system also ensures that the tenant is repaid his deposit on time.

Tenancy deposit schemes are only available for assured shorthold tenancy (AST). AST is the most common form of tenancy in the United Kingdom. AST was instituted on 15 January 1989. An AST tenant is one who considers his current residence as his main home. The property that the tenant lives in is owned or managed by a private landlord or a housing association. The private owner of an AST should not be a resident landlord. Rents charged in AST must fall within the range of £250 to £100,000 per year. The property should not be used for business, and neither should it be a licensed premise.

Tenancy Deposit Protection (TDP) Schemes

Landlords are required by law to protect the deposit within the first thirty days of tenancy. There are two types of tenancy deposit scheme. One of these is the custodial scheme. In the custodial scheme, the landlord files the tenant’s money into a TDP scheme which then protects the money. TDP scheme is a government project that protects tenancy deposits. The other deposit protection scheme is the insurance-based scheme. In the insurance-based scheme, the landlord holds the deposit but pays insurance to the scheme.

Landlords responsibility

The owner must inform his tenant the type of deposit scheme he used to protect the money. He must also disclose to the deposit scheme and the tenant all prescribed information. Specified information include the amount of deposit the tenant paid him, the address that the deposit relates to and the manner in which he will repay the deposit at the end of the tenancy. A landlord who fails to disclose this information can be taken to court by their tenant. The landlord also loses his right to evict a tenant if he fails to disclose this information and cannot repay the deposit.

Return of Deposits

Deposits are returned to tenants within ten days of the end of the tenancy. The only exception is when the tenant fails defaults in rent payment or if he damages the property. The tenant of a deposit that is protected by the custodial TDP scheme is required to fill a form before getting his money back. This form enables the scheme to know that the tenant and his landlord have agreed on the amount of deposit to be repaid. In the insurance plan, an owner is required to repay the deposit directly to his tenant. Sometimes disputes arise as to how much deposit the landlord should give back. These typically occur when the tenant damages the property, but the cost of repair is less than the amount of deposit. It is the responsibility of TDP schemes to resolve such disputes.

The government has established several incentives for making people live comfortably without paying too much on rents. One of these incentives is the housing benefit. Housing benefits are rent allowances that are given to tenants to help them pay off their rents. The allowance is usually less than the rent of the house. The tenant is expected to pay off the rest of the rent from his personal income. The housing benefit rates that resident can receive vary. Generally, the larger a household is, the more allowance he will receive.

Eligibility for Housing benefits

The Housing Executives administer housing benefits. The benefits are usually geared towards making low-income earners pay their rents easily. Some of the biggest beneficiaries of these benefits are those receiving state benefits, those working in part-time employment, and low-income earners. These people tend to struggle with rent payments and are more predisposed to homelessness. Housing benefits are also available to people living in hostels, lodgers and those living in bed and breakfast accommodation. Anyone who pays for tenancy and accommodation can apply for the benefits. The benefits are however not available to people living with close relatives and are not paying rents to Housing Associations, private companies or private landlords.

How much can you get?

There are many criteria for determining the amount of housing benefit that each household can get. One of these criteria is the amount of rent you pay and the type of landlord owning your property. The housing executive spends a portion of each tenant’s rent. The rest is paid for from the income of the household. If your landlord is a private freeholder, he may be forced by law to charge you lesser rent. Rents for tenants under the age of 35 who are living in a property of a private landlord can be subjected to shared accommodation rates.

The other criterion is the “means test”. Means test weighs the income of a tenant against the amount of rent he has to pay. It also puts into consideration the number of people in a household. The housing executive compares personal allowance with eligible income to decide whether to increase or decrease housing benefit to a household. The personal allowance is the state projection of what each household should spend in one week. The eligible income is what the household earns. If available income is more than personal allowance, the housing benefit will reduce. The means test is not applicable to those receiving passported benefits. They are automatically assumed to be earning zero eligible incomes.

Other things to know

Deductions from housing benefit can also be based on the number of people over the age of 18 years whom you are living with. The amount of housing benefit you receive will reduce if the person you are living with does not financially depend on you. The size of the reduction depends on the non-dependant's age, the type and amount of his income. The more non-dependant adults you live with, the lesser you will receive from the Housing Executive. These reductions will not be applied if you are receiving care from the person, or when you are blind.

Energy is very costly. Many households spend massive amounts of money in heating their homes and operating their electronics. The prohibitive costs of energy are felt mostly by low-income earners. The importance of energy cannot be underestimated. Winters can be freezing with temperatures falling to negative values. A human being cannot survive in this kind of weather without having some source of heat. Energy is also used to run household gadgets on a daily basis. This is why energy conservation is an requirement. The government has come up with a home energy efficiency scheme to help people enjoy the benefits of energy without incurring too much costs. The project has been particularly beneficial to low-income earners who were unable to pay for energy.

What is ECO?

One of the government incentives to provide low-cost energy is the Energy Company Obligation. ECO encourages energy companies to help households make their homes energy efficient. Established in 2013, one of its responsibilities is to ensure that homes of low-income earners are well insulated. Insulation of lofts and cavity walls prevents loss of energy from homes, especially during winter. ECO, through the Carbon Saving project, offers help with insulation of lofts and wall cavities. Only eligible households can benefit from the financial support provided by ECO. Those eligible for ECO support include people on welfare but who own private residential homes or private rental homes, and people living in Carbon Saving Community. The Carbon Saving project offers financial help to anyone who needs cavity wall and loft insulation.

ECO Supplier Eligibility

ECO has stipulated energy efficiency measures that every eligible energy supplier must achieve. Eligible energy suppliers are those that have more than 250,000 customers and supply more than 400-gigawatt hours of electricity or more than 2,000-gigawatt hours of gas. All energy suppliers are evaluated on December of every year to determine those that should work under ECO obligations. The selected energy suppliers begin meeting ECO targets on April of the year following their admission into ECO programs.

What does ECO provide?

The energy measures that the supplies are expected to achieve basically involve improvement of home insulation and heating systems. These include insulation of walls and lofts. The companies must also replace boilers and install glazed windows in qualifying households. Improvement of heating may call for connection of households to the district heating systems. The companies do not give individual households financial help. They work with installers to ensure that their ECO targets are met.

Even the companies that are eligible for ECO have different responsibilities. The objectives of each company are determined by the size of the energy market that the company commands. Larger companies have more measures to achieve. The specific calculation of a company’s target is covered in the ECO legislation. The companies must report their milestones to ECO every month. This information is recorded in the ECO register. The register is used for monitoring the performance of each energy company against the measures set out for it the by Energy Company Obligation.

House insurance covers homeowners from financial losses due to potential threats to their properties. Threats can present themselves in the case of fire, water flooding or burglary. Referred to as insurable risks, they are popular in the UK. The homeowner is compensated for any damages caused by the insured risks. Most insurance policies cover houses that are occupied. There are very few empty property insurance policies.

Insurance companies assume that the homeowner will be at home or within reach when the damage occurs. This is because most damages are caused by humans who are either negligent or have malicious intentions. The insurance companies assume that the homeowner will be available to prevent some of the damages. Homeowners are not expected to be careless simply because their properties are insured. They must participate in risk aversion. Risk aversion keeps the companies from spending money on things that could be avoided.

The maximum amount of time that most insurance companies can allow a house to be empty is thirty days. Any damages occurring after this period of time cannot be compensated for. The policy that limits the insured’s movements can be very inconveniencing to homeowners who travel a lot. People who travel for business or holidays stand a risk of losing their properties if they stay out for more than the stipulated amount of time. The problem with empty house insurance is not limited to those travelling. Sellers sometimes have to put their properties in the market for a long time before getting a buyer. Conveyance may also take longer than the period allowed by the insurance policy. This puts the seller at risk of losing a property that is damaged while still on the market or during conveyancing.

Empty properties in the UK

Over 700 000 houses in the UK are empty. This is a large number considering the fact that the UK is still experiencing problems with housing. Chances of having a squatter take advantage of a house are high. The squatter can misuse the property and cause massive financial losses to the owner of the building. Some insurance firms have come to terms with the need for homeowners to stay out of homes for a long time. Some of these companies have extended the periods of absence to sixty days, while other others ninety days. However, many homeowners still consider this extension inadequate.

Terms of Empty Property Insurance

There are terms that homeowners must fulfil for the period of coverage to be extended under the existing policy. The owners must regularly visit the property. This helps ward off squatters and vandals. The homeowner must also add extra security to the property. He must seal letter boxes to prevent theft of mail. Entrance to the house must be protected with alarm systems and secure doors and windows. Any valuable must be removed from the home and kept in a different storage place. The homeowner must also switch off all utilities. Water leakage is one of the leading causes of flooding in properties. Therefore, pipes should not be left running. Electricity has to be switched off to prevent fires.

Empty property give you an assurance of safety in case of a unpredictable loss. There are however terms that you will have to agree and follow. If you stay away from your home or are travelling a lot, this could very well be a good time to see if your insurance provider can offer you empty property insurance.

The well-being of a tenanted property is dependent on how well maintained it is. Poor maintenance leads to the quick dilapidation of buildings. Most residents believe that house maintenance is a sole responsibility of landlords. This notion can never be further from the truth. Landlords have a role to play in the overall well-being of property. Their involvement in house maintenance is limited to major responsibilities that housing laws and regulations do not allow tenants to be involved in. Day to day maintenance of the property is tenants responsibilities. Tenants should not delegate this duty to landlords. It is the routine maintenance of a property that increases its longevity.

Primary tenant responsibilities include frequent cleaning of the premises. It is absurd to expect a landlord to clean a building. Most tenanted properties do not have residential owners. Some landlords live very far from their properties. The owners sometimes take years to visit the property. The landlords hire real estate agents to help with rent collection. The landlords cannot come to the building every other day just to clean it. The tenants must clean their premises. They may hire someone else to clean the property but must still take financial responsibility for the cleaning.

The most interior decoration is the responsibility of the landlord. A tenant is not allowed to paint a house, add a ceiling or install a fireplace. However, he must ensure that electric gadgets and the plumbing system of a house are in order. He can repair appliances, install doorbells and replace a fuse. A tenant is not allowed to replace the main fuse without the consent of the landlord or the real estate agent who is in charge of the building.

The same tenant responsibility of repair and maintenance applies to the bathroom. A landlord installs sinks, toilets and bathtubs. The type of a bathtub or toilet installed in the bathroom is at the discretion of the landlord. However, a tenant can ask his landlord to install a particular kind of toilet appliance. The much a tenant can do in the bathroom on his own is replace toilet seats, change stoppers and chains for baths and sinks, and replace baths, sinks and drainers. He can only replace those that are damaged through wear and tear and not those that are not poorly fixed. If an appliance if not fixed well, the tenant must ask the landlord or his agent to fix or replace it.

Tenants must pay rent to their landlords or a real estate agent. Rents are regularly paid, usually after every month. The rent is the cost of living in a freeholder’s property. The amount of rent payable is typically fixed and non-negotiable. However, prospective tenants, especially those of residential homes can negotiate for lower rents. Failure to pay rents is punishable. Residents usually sign a document indicating the dates of rent payment. If a tenant fails to pay rent after this day, disciplinary measures can be taken. The defaulting tenant may have to pay a fine or be asked to vacate the premises.

Pets bring out the humanity in a man. They are loving, funny and make homes comfortable and fun. Unfortunately, most rental properties do not allow tenants to own pets. This is sad considering that the freeholders who come up with these rules are themselves pet owners. At the moment, over 50% of adults in the UK have pets. All these people cannot be freeholders with a total say in their properties. They can also not be rendered homeless just because they have pets. Provisions must be made to set aside for property to rent with pets.

The Problem

The problems that arise with pet ownership are the reasons for freeholders’ fear of having pets in their properties. Pets may be fun and exciting but are as dumb and needy as toddlers. Ownership of a pet does not necessarily mean that the owner will take good care of it. Pets must regularly be fed, or they will wander off to other people’s properties. The inherently aggressive pets such as dogs can harm other people. Some people keep huge snakes as pets. There are reports of snakes going berserk and hurting not only neighbours but also their owners. Damages caused by pets to people and property can result into litigations that the landlord too will find himself. Landlords fear being dragged into negligence of their tenants. That is one of the reasons why they are reluctant to allow tenants to own pets.

Pets may also cause damage to the freeholder’s property. Untrained dogs tend to litter homes and spoil carpets and other building structures. Pet owners can also wreck windows and ceilings when playing with pets. It is the responsibility of the landlord to replace windows, ceilings and other fixtures on his property. A landlord would not want to incur financial costs caused by the recklessness of a pet owner. This is another reason landlords do not allow tenants to own pets.

Tenants with pets

Rental properties are not permanent residences. No matter how much a tenant likes a flat, since he is not the owner, he will eventually have to move out. If the tenant had a pet, chances are high new residents will feel the residual effects of pet ownership. A new tenant can move into a house just to find that it is full of fleas. Fleas and bedbugs are bothersome and difficult to eradicate. Once a property is known to have bedbugs or fleas, people will shy away from renting it. This will cause the landlord heavy loses both due to lack of tenants and because of the exorbitant cost of eradicating these bugs.

The demerits of owning pets are not an absolute contraindication for not letting a property to pet owners. Landlords have figured out ways of letting people own pets without themselves bearing the burden of pet ownership. Some landlords have increased rent deposits so as to cover for costs of managing deleterious effects of pet ownership. Others have given allowance for certain kinds of pets and not others. You will find landlords who allow tenants to own cats and dogs but not snakes and racoons.

If you are a landlord and want to let your tenants have their pets, you have to understand and make terms regarding the problems you might encounter. If you are a tenant you have to find a apartment that is advertised to allow pets and follow the rules and be a responsible pet owner.

Real estate investment is becoming a lucrative business in the UK. It is gradually surpassing shares and savings in the amount of return on investment. The best thing about property investment is that it carries little risks. Chances of an investor losing his capital are very low. The growth of capital is also more or less automatic. You do not necessarily have to put in more money into your investment for the capital to grow. The housing market is experiencing rapid growth every other year. If you buy a property today, it will be worth much more in five years time.

Property Investment Zones

Property investment, like any other type of investment, must be planned for carefully. The place where the property is located determines how much return on capital the owner will get. Residential properties must be in areas where people prefer living in. In the UK, London is one of the cities that have attracted many homeowners. This is because the city is filled with various opportunities that people can exploit. The amount of real estate investment gradually declines from Zone one and two to Zone four and five. Zones six, seven and eight are yet to experience massive property investment.

Places similar to London zone one are similarly highly populated. Long term investment in these areas can be very profitable. The problem with investing in areas where the housing market is concentrated is that investment capital is always very high. It is cheaper to buy a property in zone eight than in zone one. Areas such as zone one are best left to investors who are willing to invest huge capital to enjoy quick profits.

Rent in zone one is as high as capital for property investment. Since 2016, an increasing number of people have been moving from the inner boroughs of London to the outer boroughs. This trend has been seen in other big cities in the UK. The implication is those city suburbs will in time experience rapid growth in real estate development. Return on investment in the city suburbs may currently not be appealing. However, with people migrating from the city to the suburbs, rent on the outskirts is expected to increase appreciably. The suburbs are a good place for long-term property investment.

Type of property to invest

The type of property you invest in also determines the return on investment. Property investment targets people who need accommodation. These people can be students, highly skilled workers and even low-income earners. These people have different needs. Some will want spacious houses while others will need decent flats. You can take a good look at the place you want to invest in and see the type of people living there. If your property is near universities and colleges, you will need to concentrate more on hostels. Flats are mostly seen just on the outskirts of city centres. The flats majorly target middle-class people who work in the city. If you are investing further out of the city centre, you may want to buy a residential home. The type of home ownership will also determine your ability to attract buyers.

Rental properties are subjected to tax like any other commercial enterprises. If you had a rental house and moved out of it, you may choose to rent it out or to sell it. The law is very considerate for homeowners. Owners of flats are assumed to be of moderate financial incomes and are therefore not pushed to the wall by tax and revenue authorities. Those who move out from flats are given a relief period during which they can either rent out their flats or sell it. If they rent out their apartments, they will not be subjected to capital gains tax on rental property.

If they sell the flat, the profit they make may or may not be subjected to taxation. Tax relief is granted to those who sell their properties within a certain period of time since moving out. The period is commonly referred to as the “private residence relief final period exemption”. Sale of property after this time period is believed to be premeditated and is subject to taxation by the HM Revenue & Customs (HMRC). The period of tax relief was 36 months before 6 April 2014. It has been changed drastically since then. The time period remains the same for people who are disabled and those who move into residential homes for care.

How are gains on the sale of a rental flat calculated?

Gains on sale of a rental flat is calculated based on several factors. Most of these factors are reliefs that reduce the amount of tax that is charged on the sale of the property. They are reliefs that are granted by the HM Revenue & Customs to the seller of the rental flat. These reliefs include the private residence relief and rental relief. Private residence relief is a tax relief granted to those who move from rental flats to private homes. It is a token of appreciation for growth from flat ownership to residential property ownership. Rental reliefs are given to those who rent out their flats before selling it out.

The reliefs are included in the calculation of the net profit on the sale of property. Profit on sale is basically the difference between the amount f money lost in the purchase of the property and that gained from the sale of the property. Reliefs and expenses must be put into consideration when calculating net profit. The expenses that are expected in property sales include legal fees, stamp duty, and the cost of renovating the property.

Calculation of private residence relief is a bit complicated. Remember that the legally stipulated relief period is 18 months. To get private residence relief, you must add the number of months you lived on a property to 18 months. You then divide this sum by the total number of months you owned the property. The numerator and denominator of this equation may seem to be the same but are in most cases very different. An individual who lives in a property for two years and sells it after three years of moving out will have owned the property for 60 months but only lived in it for 24 months. The numerator is 24 added to the 18 month relief period. That is 42 months. The denominator will be the 60 month period of ownership. This is basically how net profit on property sale is calculated.

Asking prices for real estate has been on the rise in the past six years, save for 2016. The move by the UK to get out of European Union has cast doubts on the possible changes in prices of real estate. Terms of Brexit are not yet known but are expected to be out on or before 2018. Till then, London house prices forecast are expected to be very erratic.

Apart from Brexit, house prices in London are affected by this new trend of Londoners to move from the city centre to outer boroughs and other towns outside the city centre. The move is triggered by a progressive increase in house prices that have is well known in London city centre area in the past few years. House prices in outer boroughs of London, also known as zone 2, are expected to grow by 1% above the UK house prices of 2017. This is a simple response to the increase in demands of houses in these parts of London. Increased prices are meant to offset the surge in demand for housing in the outer boroughs.

Meanwhile, house prices in the London are expected to fall due to the rapid decline in demand. Prices in the city centre are expected to fall by 5% in 2017. Such decrease in house prices is projected to affect many parts of the UK. Real estate agents are not willing to sell at the low prices. Supply of real estate is still tight. As at the end of 2016, the available property for sale is down by 5% per agent.

Absurd changes in house prices begun in 2016. After a steady five-year rise in prices, the house prices fell dramatically in 2016. This was expected from the moment Britain signed a referendum to get out of European Union. House prices have been oscillating since then. Many economy researchers and other stakeholders have projected possible scenarios that the house prices will take in the next two years. One thing about these predictions is that they all show a common trend of increase or decrease. They only differ in how much house prices will grow or fall.

One of the real estate stakeholders to forecast on price trends is the Savills Estate Agents. Savills foresee buyer reticence in the next two years. Sellers will also withdraw most of their commodities from the housing market until maybe 2018. This will result in zero price growth in 2017 followed by 2% increase in 2018. Savills also foresee a 16% fall in the number of homes that will sell in the housing market in 2017. The number of homes changing hands will fall further in 2018. This fall in property sales can be because of the increase in the upfront cost of rental properties due to the introduction of stamp duty surcharge in April 2016. A decrease in tax relief that landlords can get from mortgage payments is also a cause for the fall. The general trend in house prices as forecasted by Savills is also corroborated by other reputable real estate stakeholders.

Buying a home is never easy. Houses are some of the most expensive properties in the UK. Real estate agents have come up with various methods of getting people to own homes without feeling the financial burden. They have come up with commonhold ownership and leasehold ownership to save people from the financial trouble of acquiring freehold properties. Mortgage lenders have also introduced various loan packages to help people in financing home ownership. These methods, though effective, have proven to be a burden in the long run. Commonhold and Leasehold properties have their disadvantages. Mortgages become a burden of their own in due time. These difficulties have prompted people to look for ways of purchasing properties in cash and enjoy the kind of home ownership that they desire. This is why many people are now paying for homes in cash. Buying a house without a mortgage might not be easy, but it gives you much relief once you are settled in your new home.

Plan early

Housing prices aren’t going down. And if have a plan of buying a house without a mortgage, it will take some planning. Check your finances, cost of living, salaries and other needs you’d like in your new house. Take a general look at the real estate trends in your area. And then find a house that suits you best. You can talk to real estate agents and find out the current housing plans and if there are any changes expected in the future. Once you find a good house, ask its price. Also, see if there are any special payment plans offered. You will be surprised at the number of real estate agents are considerate to prospective buyers in their payment plans.

Your ability to buy a house without a mortgage is largely dependent on your financial status. If you have the money, and you have found a suitable home, then you can initiate conveyance. All you have to do is talk to a solicitor. He will guide you through conveyance. He will tell you the documents that are required and the kind of research needed. The length of time till you purchase the house will vary depending on many factors. Your conveyancer will advise you on this too.

Save with the rising prices in mind

If you do not have enough money to buy a house in one ago, then you might want to start saving early. The sooner you get saving, the higher your chances of buying the house faster. Keep a little money aside from time to time. You may consider calculating the amount of money you save as proportion of the price of the house. This will give you a rough estimate of the time till your savings are enough to buy the house. Take into account possibilities of increase in house prices. You can talk to real estate agents or other experts about any foreseeable increase in house prices.

Payments by Instalments

Some people do not have the discipline to save money for that long. There is always a temptation to withdraw the money and use it for emergencies. If this is your problem, you can get around it by paying for the house in instalments. Some real estate agents accept small payments for a house. Look for them. The money you pay cannot be refunded. This method of payment is a security against any temptation to spend the money that is reserved for the purchase of the house.